Why culture is critical for digital transformation: three tips to help you succeed

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Why culture is critical for digital transformation: three tips to help you succeed
Disruption and change are both salient aspects of digital transformation.
Photo by fabio on Unsplash

With the pace of innovation and technological change in the world today, digital transformation is undeniably critical to long-term business success.

Yet according to McKinsey and Company, less than 30% of companies successfully achieve long-term transformation. Even in industries like technology and telecommunications, which are typically very digitally savvy, the success rate for digital transformation is just 26%.  

There are many factors that contribute to a company’s failure or success when it comes to enabling and sustaining digital transformation. From not having the right leadership and strategy in place, a lack of resources or talent to appropriately execute transformation initiatives or innovating for the sake of it and not understanding the drivers of change.

In my experience leading the technology function of several companies, it’s the people and not the technology that ultimately determine the success of digital transformation initiatives. I have seen far too many companies take a blinkered approach, focusing on tangible business outcomes like increasing productivity and profitability. While obviously important, it’s the intangible measures of success like employee satisfaction, happiness and wellbeing that really make or break the digital transformation journey.   

Bringing people on the journey

Disruption and change are both salient aspects of digital transformation. Whether that’s introducing entirely new technologies, overhauling systems, or bringing in new leaders, change is an inevitable part of the process.

Effectively managing this degree of change certainly isn’t easy. This is especially true for well-established companies who have a high number of legacy employees. In this case, these employees have likely been with a company for many years and built the technology foundations that are the target of digital transformation initiatives. They may understandably feel defensive or resentful of change attempts. What’s important here is making employees feel valued for their contribution to the company, while clearly articulating their role in making the transformation successful. Employees bring invaluable knowledge and years of expertise that you can’t get on the outside. Neglecting to nurture this can be costly and lead to disenfranchisement and resentment.

According to Harvard Business Review one of the main reasons employees resist change is because they care about the company they work for, and therefore worry about what impact change will have on their organisation and their identity that is tied to it. Instead of focusing on what will change, leaders should highlight what will stay the same.

Good leaders bring people on the digital transformation journey. They maintain a sense of continuity to give employees peace of mind while keeping them involved and included. I’ve seen many employees evolve from being pessimistic at the beginning of digital transformation initiatives, into evangelists and changemakers themselves the further this journey progresses.

Creating a culture of continuous improvement

For me, successful digital transformation also spurs from a unified passion and pursuit for continuous improvement. At MNF Group that means finding better and more efficient ways to service our customers while looking after the people that make our success possible.  

Instilling this culture of continuous improvement into every individual in an organisation is certainly challenging. Having the right leaders to set this example is a critical component to achieving this, as is having a clearly articulated company vision that resonates with employees. Attracting and hiring the people who share this growth mindset can help further cultivate this, but organisations must first practice what they preach. 

A culture of continuous improvement can not only help accelerate digital transformation initiatives but can enable companies to scale more quickly by having an agile and responsive workforce. It can also help when it comes to identifying new opportunities for growth. With the rapid speed of innovation, staying ahead of the curve and exploring these opportunities before competitors is crucial.      

Better equipped for unexpected change

The COVID-19 pandemic highlighted how quickly companies can adapt when they have no other option. From an operational perspective, one of the most common challenges was adopting new technologies like unified communications to support increased use of video conferencing and new ways of working.

The pandemic also forced companies to rethink how they engaged with their people, creating new cultural challenges with the removal of the traditional workplace. Companies that already had a culture that embraces and welcomes change were able to do this more quickly and seamlessly than those without this agility instilled at a cultural level. This was my experience at MNF Group, the initial transition to remote working was an easy one for us and we’ve since made flexible working a permanent fixture of our ways of working.   

Ensuring leaders were accessible and available to allow employees to voice their concerns greatly contributed to this transition. Having these conversations on platforms where everyone in the company could participate also helped with accountability and in identifying ways we could further support our people.  

In today’s world technology is constantly evolving and it’s impossible to tell what technology will be the next big thing. Digital transformation is essential to driving innovation so companies can more quickly adapt to new challenges in what is an increasingly competitive playing field.

Leaders must remember just how important people and culture is in the success and longevity of digital transformation. It’s not a process that ever truly ends, and one that will face setbacks and roadblocks along the way. A culture that can effectively adapt and pivot when necessary, smooth growing pains and overcome challenges, will be best placed for success.

John Boesen is Group Chief Technology Officer at MNF Group.

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